Cuộc họp công bố kết quả kinh doanh Quý 3/2026 của Amphenol (APH): AI thúc đẩy mảng IT Datacom tăng trưởng tự thân 77%

Tập đoàn Amphenol (NYSE: APH) báo cáo doanh số, đơn đặt hàng và lợi nhuận đã điều chỉnh kỷ lục trong quý 3 năm 2026, nhờ nhu cầu tăng tốc đối với cơ sở hạ tầng trí tuệ nhân tạo. Mảng IT datacom chiếm 48% doanh số hàng quý, trong đó các ứng dụng AI chiếm khoảng 3/4 mảng kinh doanh này.

Điểm chính

• Doanh số quý 3 năm 2026 đạt mức kỷ lục 10,2 tỷ USD, tăng 65% so với cùng kỳ năm trước và tăng 37% theo phương thức tự thân. Tăng trưởng doanh số so với quý trước là 17%, trong đó tăng trưởng tự thân là 16%.
• Đơn đặt hàng tăng 99% so với cùng kỳ năm trước lên mức kỷ lục 12,170 tỷ USD, tạo ra tỷ lệ book-to-bill là 1,19:1. Đơn đặt hàng tăng 13% so với quý trước.
• EPS pha loãng đã điều chỉnh tăng 74% lên mức kỷ lục 0,80 USD. Biên lợi nhuận hoạt động đã điều chỉnh mở rộng 220 điểm cơ bản so với cùng kỳ năm trước lên 29,7%.
• Doanh số mảng IT datacom tăng 117% so với cùng kỳ năm trước và tăng 77% theo phương thức tự thân. Ban lãnh đạo cho biết phần lớn mức tăng 30% so với quý trước đến từ nhu cầu AI.
• Ban lãnh đạo dự báo doanh số quý 4 đạt từ 10,3 tỷ USD đến 10,5 tỷ USD và EPS pha loãng đã điều chỉnh đạt từ 0,81 USD đến 0,83 USD.
• Dự báo cho cả năm 2026 đưa ra doanh số đạt từ 36,9 tỷ USD đến 37,1 tỷ USD và EPS pha loãng đã điều chỉnh đạt từ 2,82 USD đến 2,84 USD.

Dữ liệu tài chính cốt lõi

Không tính lợi ích từ việc thu hồi thuế quan, ban lãnh đạo cho biết biên lợi nhuận hoạt động đã điều chỉnh đã cải thiện khoảng 70 điểm cơ bản so với quý trước. Sự cải thiện này phản ánh đòn bẩy hoạt động và mức tăng khả năng sinh lời tại các công ty vừa thâu tóm gần đây, đặc biệt là CommScope.

Amphenol đã mua lại 3 triệu cổ phiếu với giá trung bình khoảng 81 USD trong quý. Bao gồm cả cổ tức thường niên, tổng vốn trả lại cho cổ đông là khoảng 553 triệu USD. Hội đồng quản trị cũng phê duyệt mức tăng cổ tức 20% lên 0,15 USD cho mỗi cổ phiếu, bắt đầu thanh toán vào tháng 1 năm 2027, và một chương trình mua lại cổ phiếu mới thời hạn ba năm trị giá 4 tỷ USD có hiệu lực từ ngày 1 tháng 1 năm 2027.

Kết quả kinh doanh và hoạt động

AI thúc đẩy tăng trưởng mảng IT datacom

Mảng IT datacom chiếm 48% doanh số quý 3. Doanh thu tăng 117% so với cùng kỳ năm trước, trong đó tăng trưởng tự thân đạt 77%, và tăng 30% so với quý trước. Ban lãnh đạo cho rằng sự tăng tốc này là nhờ các ứng dụng AI và sức mạnh tiếp diễn của mảng kinh doanh IT datacom cốt lõi.

AI chiếm khoảng 3/4 doanh số mảng IT datacom. Amphenol nhấn mạnh các sản phẩm kết nối cáp đồng tốc độ cao, quang học và nguồn điện là các công nghệ cốt lõi hỗ trợ các hệ thống máy tính thế hệ tiếp theo. Ban lãnh đạo dự kiến doanh số IT datacom quý 4 sẽ tăng ở mức một chữ số tầm trung so với quý 3 và doanh số cả năm sẽ tăng hơn gấp đôi.

CommScope cũng được hưởng lợi từ nhu cầu trung tâm dữ liệu. Amphenol đã nâng triển vọng năm 2026 cho CommScope lên 5,1 tỷ USD doanh số và đóng góp 0,18 USD vào EPS đã điều chỉnh. Doanh số IT datacom của CommScope hiện dự kiến sẽ tăng hơn gấp đôi vào năm 2026 và chiếm khoảng một nửa doanh thu hàng năm, so với khoảng một phần ba trong năm trước.

Kết quả theo mảng

Xu hướng thị trường cuối

• Công nghiệp: Chiếm 18% doanh số. Doanh thu tăng 60% so với cùng kỳ năm trước và 25% theo phương thức tự thân, với mức tăng trưởng diện rộng trên khắp các khu vực địa lý và thị trường phụ bao gồm tự động hóa tòa nhà, thiết bị đo đạc, dầu khí, năng lượng thay thế, điện hóa và tự động hóa nhà máy.
• Ô tô: Chiếm 10% doanh số. Doanh thu tăng 13%, bao gồm 9% tăng trưởng tự thân, được hỗ trợ bởi xe điện và sự tăng trưởng trên tất cả các khu vực.
• Quốc phòng: Chiếm 8% doanh số. Doanh thu tăng 42% và 30% theo phương thức tự thân, với sức mạnh trên các mảng vũ vũ trụ, hệ thống mặt đất, phương tiện không người lái, truyền thông, điện tử hàng không, đạn dược và ứng dụng hải quân.
• Mạng truyền thông: Chiếm 8% doanh số. Doanh thu tăng 25% nhờ CommScope, nhưng giảm 28% theo phương thức tự thân do chi tiêu cho băng thông rộng và nhà mạng suy yếu.
• Thiết bị di động: Chiếm 5% doanh số. Doanh thu tăng 31%, bao gồm 29% tăng trưởng tự thân, dẫn đầu là các thiết bị đeo, điện thoại di động, máy tính xách tay và phụ kiện.
• Hàng không thương mại: Chiếm 3% doanh số. Doanh thu tăng 23%, bao gồm 22% theo phương thức tự thân, khi sản lượng sản xuất máy bay tăng và Amphenol mở rộng hàm lượng linh kiện trên các máy bay thế hệ tiếp theo.

Hoạt động thâu tóm

Amphenol đã hoàn tất thương vụ thâu tóm Empire Electronics vào tháng 9. Empire dự kiến sẽ tạo ra doanh thu khoảng 320 triệu USD vào năm 2026 và mở rộng danh mục sản phẩm kết nối ô tô của Amphenol, đặc biệt là trong các ứng dụng chiếu sáng.

Công ty cũng đã ký các thỏa thuận chính thức để thâu tóm:

• AdvancedPCB: Doanh số dự kiến năm 2026 khoảng 270 triệu USD; bảng mạch in công nghệ cao cho thị trường quốc phòng và công nghiệp.
• Dexgreen Limited: Doanh số dự kiến năm 2026 khoảng 90 triệu USD; các sản phẩm kết nối cáp quang tập trung vào các ứng dụng cáp quang đến tận nhà tại Châu Âu.
• Humanetics Sensors: Doanh số dự kiến năm 2026 khoảng 70 triệu USD; cảm biến lực, sản phẩm cảm biến cáp quang và các giải pháp gia công siêu nhỏ.

Ban lãnh đạo dự kiến ba giao dịch này sẽ hoàn tất trong khoảng thời gian từ ngày họp báo cáo kết quả kinh doanh đến cuối quý 1 năm 2027.

Dự báo của ban lãnh đạo

Triển vọng dựa trên giả định điều kiện thị trường hiện tại và tỷ giá hối đoái không đổi. Dự báo này chưa bao gồm AdvancedPCB, Dexgreen và Humanetics Sensors vì các thương vụ thâu tóm đó chưa hoàn tất.

Kỳ vọng của ban lãnh đạo về các thị trường cuối trong quý 4 bao gồm tăng trưởng so với quý trước ở mức một chữ số tầm trung trong mảng IT datacom và quốc phòng, tăng trưởng khoảng 35% ở mảng thiết bị di động, doanh số hàng không thương mại ổn định, và sự hạ nhiệt ở mảng công nghiệp và ô tô. Doanh số mảng mạng truyền thông dự kiến sẽ tiếp tục giảm do sự suy yếu kéo dài, đặc biệt là ở mảng băng thông rộng.

Cho cả năm, ban lãnh đạo dự kiến doanh số mảng IT datacom sẽ tăng hơn gấp đôi, tăng trưởng mảng quốc phòng trên 35%, tăng trưởng mảng công nghiệp trên 50%, tăng trưởng mảng mạng truyền thông trên 40%, tăng trưởng mảng thiết bị di động trên 30%, tăng trưởng mảng hàng không thương mại khoảng 20% và tăng trưởng mảng ô tô khoảng 10%.

Rủi ro và các điểm cần theo dõi

• Doanh số tự thân mảng mạng truyền thông giảm 28% so với cùng kỳ năm trước, và ban lãnh đạo dự kiến mảng này sẽ tiếp tục suy yếu so với quý trước trong quý 4 trong bối cảnh chi tiêu cho băng thông rộng còn yếu.
• Ban lãnh đạo thừa nhận có sự không chắc chắn về nhu cầu ở một số phân khúc trong mảng ô tô mặc dù hoạt động giành hợp đồng thiết kế vẫn tiếp diễn và hàm lượng linh kiện điện tử gia tăng.
• CommScope và toàn bộ tổ chức đang quản lý các hạn chế liên quan đến lao động, thủy tinh và các nguyên vật liệu khác. Ban lãnh đạo cho biết CommScope đã đa dạng hóa cơ sở nhà cung cấp và đảm bảo thêm nguồn cung.
• Các thương vụ thâu tóm gần đây có thể làm pha loãng biên lợi nhuận hợp nhất cho đến khi khả năng sinh lời cải thiện. Biên lợi nhuận hoạt động của CommScope hiện ở mức khoảng hơn 20%, thấp hơn biên lợi nhuận đã điều chỉnh 29,7% của Amphenol.
• Mảng IT datacom hiện chiếm 48% doanh số. Ban lãnh đạo nhấn mạnh việc đa dạng hóa trong thị trường theo khách hàng, công nghệ và cấp độ hệ thống, đồng thời tiếp tục đầu tư trên các thị trường cuối khác.
• Chi phí vốn có thể vượt khoảng lịch sử 3%-4% doanh số trong các giai đoạn tăng trưởng nhanh, mặc dù ban lãnh đạo tiếp tục xem 3%-4% là khoảng phù hợp trong dài hạn.

Điểm nổi bật trong phần Q&A với chuyên gia phân tích

• Nhu cầu AI và thời điểm: Ban lãnh đạo cho biết sự tăng trưởng mạnh mẽ của mảng IT datacom trong quý 3 không phản ánh việc đẩy nhanh đơn hàng hay sự biến động thất thường theo dự án. Công ty đã đáp ứng nhu cầu của khách hàng và dự kiến sẽ tiếp tục tăng trưởng ở mức một chữ số tầm trung so với quý trước trong quý 4 từ nền tảng cao của quý 3.
• Kiến trúc AI tương lai: Amphenol không thảo luận về các thiết kế cụ thể của từng khách hàng nhưng cho biết các hệ thống thế hệ tiếp theo tiếp tục yêu cầu nhiều nội dung kết nối cáp đồng, quang học và nguồn điện hơn.
• Kết nối nguồn điện: Nguồn điện là một phần quan trọng trong mảng kinh doanh AI của Amphenol, mặc dù các sản phẩm tốc độ cao và quang học có quy mô lớn hơn. Ban lãnh đạo nhận thấy các cơ hội tăng trưởng khi khách hàng áp dụng các định dạng công suất cao hơn, bao gồm các kiến trúc 800 volt và cao hơn nữa.
• Tiềm năng biên lợi nhuận: Ban lãnh đạo vẫn giữ nguyên khung chuyển đổi biên lợi nhuận bổ sung 30% trong dài hạn, nhưng kỳ vọng tăng trưởng tự thân và khả năng thực thi hoạt động sẽ hỗ trợ mở rộng thêm biên lợi nhuận theo thời gian.
• Tích hợp CommScope: Ban lãnh đạo cho rằng tiến độ của CommScope là nhờ tăng cường khả năng tiếp cận vốn, các nguồn lực toàn cầu và quyền sở hữu hoạt động phi tập trung thay vì các hiệu ứng cộng hưởng chi phí áp đặt từ trung ương. Công ty nhận thấy tiềm năng dài hạn để biên lợi nhuận của CommScope đạt mức trung bình toàn tập đoàn của Amphenol.
• Triển vọng mảng quốc phòng: Ban lãnh đạo đã nêu rõ tăng trưởng trên diện rộng, sự gia tăng áp dụng các thiết bị điện tử tiên tiến và nhu cầu bổ sung hàng tồn kho nhiều năm ở nhiều quốc gia là những động lực thúc đẩy nhu cầu trong dài hạn.

Toàn văn bản ghi cuộc họp báo cáo kết quả kinh doanh

Toàn văn cuộc gọi công bố kết quả kinh doanh

Phần trình bày của ban lãnh đạo

Operator

Hello, and welcome to the Third Quarter 2026 Earnings Conference Call for Amphenol Corporation. [Operator Instructions] At the request of the company, today's call is being recorded. If anyone has any objections, you may disconnect at this time.

I would now like to introduce today's conference host, Mr. Craig Lampo. Sir, you may begin.

Craig Lampo

Thank you very much. Good afternoon, everyone. This is Craig Lampo, Amphenol's CFO, and I'm here together with Adam Norwitt, our Chairman and CEO. We would like to welcome you to our third quarter 2026 conference call. Our third quarter 2026 results were released this morning. I will provide some financial commentary, and then Adam will give an overview of the business and current market trends. Then we will take your questions.

As a reminder, during the call, we may refer to certain non-GAAP financial measures and make certain forward-looking statements. So please refer to the relevant disclosures in our press release for further information. In addition, as a result of our recently announced 2-for-1 stock split effective on September 3, 2026, all share and per share data discussed on this earnings call will reflect that split.

The company closed the third quarter of 2026 with record sales of $10.2 billion and GAAP and adjusted diluted EPS of $0.79 and $0.80, respectively. Third quarter sales were up 65% in U.S. dollars and in local currencies and 37% organically compared to the third quarter of 2025. Sequentially, sales were up 17% in U.S. dollars and in local currencies and up 16% organically. Adam will comment further on trends by market in a few minutes.

Orders in the quarter were a record $12.170 billion, up a strong 99% compared to the third quarter of 2025 and up 13% sequentially, resulting in another very strong book-to-bill ratio of 1.19:1. This impressive book-to-bill was driven by robust bookings in most of our end markets with positive book-to-bill in all but one of our end markets this quarter.

GAAP and adjusted operating income were both approximately $3 billion in the quarter, and GAAP and adjusted operating margin were 29.5% and 29.7%, respectively. On an adjusted basis, operating margin increased by a strong 220 basis points from the third -- from the prior year quarter and declined a modest 10 basis points sequentially.

The year-over-year increase in adjusted operating margin was primarily driven by robust operating leverage on the significantly higher sales volumes, which more than offset the margin dilutive impact of recent acquisitions. On a sequential basis, the slight decrease in adjusted operating margin was driven by a meaningfully larger benefit from tariff recoveries in the second quarter.

Excluding these benefits, our adjusted operating margin improved by approximately 70 basis points, reflecting strong conversion on higher sales levels as well as continued progress on profitability improvement at recent acquisitions, and particularly CommScope.

I am very proud of the company's operating margin performance in the third quarter, which reflects continued strong execution by our team. Breaking down third quarter results by segment compared to the third quarter of 2025. Sales in the Communications Solutions segment were $6.6 billion and increased by 99% in U.S. dollars and 51% organically, and segment operating margin was 33.1%.

Sales in the Harsh Environment Solutions segment were $2 billion and increased by 35% in U.S. dollars and 29% organically, and segment operating margin was 30.1%. Sales in Interconnect and Sensor Systems segment were $1.6 billion, increased by 17% in U.S. dollars and 11% organically, and segment operating margin was 20%.

The company's GAAP effective tax rate for the third quarter was 27.4% and the adjusted effective tax rate was 27%, which compared to 23.5% and 27% in the third quarter of 2025, respectively. As is our typical practice, our adjusted tax rate excludes the tax effect of acquisition-related costs and the excess tax benefit from stock option compensation as well as other discrete tax items.

GAAP diluted EPS was a record $0.79 in the third quarter, up 61% compared to the prior year period. And on an adjusted basis, diluted EPS was a record $0.80 and increased by 74% compared to $0.46 in the third quarter of 2025. This was an outstanding result.

Operating cash flow in the third quarter was $2.1 billion or 102% of net income and free cash flow was $1.6 billion or 80% of net income, an excellent result considering the growth we have experienced. From a working capital standpoint, inventory days, days sales outstanding and payable days were all within our normal ranges.

During the quarter, the company repurchased 3 billion (sic) [ 3 million ] shares of common stock at an average price of approximately $81. And when combined with our normal quarterly dividend, total capital returned to shareholders in the third quarter of 2026 was approximately $553 million.

As noted in the earnings release, the Board of Directors approved an increase to the company's quarterly dividend by 20% to $0.15 per share, effective for payments beginning in January of 2027.

As also noted in the earnings release, the company's Board of Directors approved a new 3-year $4 billion stock repurchase plan, which will become effective on January 1, 2027. The company expects to complete the remaining purchases under existing stock repurchase plan by December 31, 2026.

Total debt at September 30 was $17.9 billion, and net debt was $12.6 billion. Total liquidity at the end of the third quarter was $8.3 billion, which included cash and short-term investments on hand of $5.3 billion, plus availability under existing credit facilities.

Third quarter 2026 adjusted EBITDA was $3.4 billion, and our net leverage ratio was 1.1x at the end of the quarter. We are very pleased with the company's robust financial position.

I will now turn the call over to Adam, who will provide some commentary on current market trends.

R. Norwitt

Well, thank you very much, Craig, and I'd like to extend my welcome to everybody on the call here today. And I hope you're having an enjoyable fall so far. I have to tell you that here in Wallingford, Connecticut, is a truly beautiful New England fall day.

As Craig mentioned, I'm going to highlight our third quarter achievements and include a few comments about the acquisitions that we announced today. I'll also discuss our trends and progress across our served markets, and I'll make some comments on our outlook for the fourth quarter and the full year 2026. And of course, we'll have time for questions thereafter.

With respect to the third quarter, I'm just so proud of our team. They drove truly excellent performance once again in the third quarter. Our results were significantly stronger than expected, exceeding the high end of guidance in sales and adjusted diluted earnings per share.

Our sales grew from prior year by 65% in U.S. dollars and local currencies, reaching a new record $10.2 billion. On an organic basis, our sales increased by 37%, driven by strong organic growth of more than 20% in 5 of our 7 end markets. And I'll talk about each of those markets in a few moments.

The company booked a record $12.2 billion in orders in the third quarter, representing a book-to-bill of 1.19:1. Orders essentially doubled from prior year and were up 13% sequentially. And as Craig commented, our book-to-bill was positive in nearly all of our end markets.

We're also very pleased to have delivered robust adjusted operating margins of 29.7% in the quarter, an increase of 220 basis points from prior year. This strong profitability is a direct result of the outstanding execution of the Amphenol team around the world who continue to manage well in a challenging cost environment.

Adjusted diluted EPS grew 74% from prior year, reaching a new record of $0.80 per share. And we generated record operating and free cash flow in the quarter, $2.1 billion and $1.6 billion, respectively, another clear demonstration of the quality of the company's earnings.

Finally, I'm really pleased that our Board of Directors has approved a 20% increase in our quarterly dividend to $0.15 a share as well as a new $4 billion 3-year stock repurchase program. I just can't emphasize enough my pride in and my gratitude to the Amphenol team around the world. Our results this quarter once again reaffirm the value of the drive, discipline and agility of our entrepreneurial organization as we continue to perform well amidst a very dynamic environment.

We're also very pleased that this quarter, we announced 4 acquisitions, one of which closed in the quarter and 3 of which we signed definitive agreements for and expect to close between now and the end of the first quarter. First, we closed on the acquisition of Empire Electronics at the beginning of September.

With 2026 full year revenue expected to reach approximately $320 million, Empire is a leading manufacturer of complex interconnect assemblies for the automotive market with a particular focus on automotive lighting applications. The company is headquartered in Michigan with approximately 4,800 employees worldwide. This company is included in our Interconnect and Sensor Systems segment.

We're also excited that we signed definitive agreements for the acquisition of AdvancedPCB, Dexgreen Limited and Humanetics Sensors. First, AdvancedPCB is a U.S.-based manufacturer of high-technology printed circuit boards for the defense and industrial markets. The company is headquartered in Colorado and expects full year sales of approximately $270 million this year. AdvancedPCB has approximately 800 employees across their 6 facilities in the U.S. and will be included in our Harsh Environment Solutions segment post closing.

Next, Dexgreen is an Ireland-based provider of fiber optic connectivity products, primarily for the European fiber-to-home applications in the communications network market. With approximately 100 employees, Dexgreen is expected to generate full year 2026 sales of approximately $90 million and will be included in the Communications Solutions segment post closing.

Finally, Humanetics Sensors is a leading provider of precision force sensors, specialty fiber optic sensing products and micromachining solutions for the commercial air, defense and industrial markets. The company has approximately 350 employees and expect full year 2026 sales of approximately $70 million. This company will be included in our Interconnect and Sensor Systems segment post closing.

I just have to say our team was very busy this quarter, but we remain confident that our acquisition program will continue to create great value for the company. Our ability to identify and execute acquisitions and then very importantly, to successfully bring these new companies into Amphenol remains a core competitive advantage for the company.

Now turning to our served markets. I just want to reiterate how proud we are of Amphenol's broad and balanced end market exposure. Our diverse exposure across the electronics industry enables us to continue to participate across all areas of the global electronics industry, each of which represents significant future opportunities for expansion.

We also remain committed to continuing to broaden our portfolio across markets, geographies, customers, applications and products as we build on the company's momentum to further strengthen Amphenol's position long into the future.

So with that said, the defense market represented 8% of our sales in the quarter. Sales grew from prior year by a strong 42% in U.S. dollars and 30% organically, and this was driven by robust growth across virtually all segments of the defense market. Sequentially, our sales grew by 12%, which was largely in line with our expectations coming into the quarter.

As we head into the fourth quarter, we expect a mid-single-digit increase in sales from these third quarter levels. And for the full year 2026, we anticipate sales to increase by more than 35%, primarily driven by strong organic growth as well as the benefit of acquisitions.

We remain very encouraged by the company's leading position in the defense interconnect market, where we offer the industry's widest range of high-technology products to both traditional and new defense equipment manufacturers.

Amidst the current dynamic geopolitical environment, countries around the world are increasing their investments into both current and next-generation defense technologies. With our expanded product offering as well as the significant capacity expansions we have made in recent years, we are positioned better than ever to capitalize upon this long-term demand trend.

The commercial air market represented 3% of our sales in the quarter. Sales increased by 23% from prior year and 22% organically as we benefited from increasing aircraft production volumes, coupled with continued progress in expanding our content on next-generation commercial aircraft. Sequentially, our sales grew by 9% from the second quarter, which was much better than our expectations coming into the quarter.

Looking into the fourth quarter, we expect sales to remain at these strong third quarter levels. And for the full year 2026, we anticipate sales to increase by approximately 20%. I am truly proud of our team working in the commercial air market.

With the ongoing growth in demand for next-generation aircraft, our efforts to expand our product offering, both organically and through our acquisition program continue to pay real dividends. We look forward to further capitalizing on our expanded range of product solutions for the commercial air market long into the future.

The industrial market represented 18% of our sales in the quarter. Our sales in this market grew by 60% in U.S. dollars and 25% organically as we saw continued strong demand across the diversified industrial market and as we benefited from the addition of CommScope's building connectivity business.

On an organic basis, virtually all of our industrial submarkets grew in the quarter with all 3 geographies also showing strong growth. On a sequential basis, sales grew by 7% from the second quarter, which was much better than our expectations.

As we look into the fourth quarter, we do expect sales to moderate somewhat from these robust third quarter levels. For the full year 2026, we now expect sales growth of more than 50%, reflecting both strong organic growth as well as the benefit of acquisitions.

We're very excited by the company's strength across the many diversified segments of this important market. I remain confident in our strategy to expand our high-technology interconnect, antenna and sensor offerings, both organically and through complementary acquisitions. This strategy has enabled Amphenol to capitalize on the many electronic revolutions that continue to occur across the diversified industrial market, thereby creating further opportunities for our outstanding team.

The automotive market represented 10% of our sales in the quarter and grew 13% in U.S. dollars and 9% organically. This was driven really by strength in electric vehicles as we once again drove growth in all regions. Sequentially, our sales grew by 12% from the second quarter, which was much better than our expectations, reflecting the ability of our team to quickly execute on a range of opportunities, together with some impact from the addition of Empire late in the quarter.

For the fourth quarter, we do expect a slight sales moderation from these third quarter levels. And for the full year 2026, we anticipate that sales will increase in the 10% range from prior year. I remain very proud of our team working in the global automotive market. With the acquisition now of Empire, we have broadened our portfolio once again, in particular around value-add interconnect products to this important market.

While there are no doubt pockets of demand uncertainty across the automotive market, our team continues to be focused on driving new design wins with customers who are increasing the content of new electronics being integrated into their next-generation vehicles. We look forward to benefiting from our strengthened position in the automotive market for many years to come.

The communications networks market represented 8% of our sales in the quarter. Sales grew from prior year by 25% in U.S. dollars, driven by the addition of CommScope. On an organic basis, though, sales did decline by 28% from prior year, due in particular to moderations in demand from the broadband market as well as from other communication network operators. On a sequential basis, our sales declined by 13%, which was in line with our expectations.

Looking to the fourth quarter, we expect a further decline in sales from these third quarter levels on continued softness in spending, particularly in broadband. For the full year 2026, we expect sales growth of more than 40%, driven by the CommScope acquisition, partially offset by some organic decline.

With our expanded range of technology offerings following the acquisitions of both CommScope and Andrew, there's no doubt that we are well positioned with both service provider and OEM customers across the communications networks market. Our deep and broad range of products, coupled with our global manufacturing footprint have positioned us well to support customers around the world whenever they choose to expand their networks.

The mobile devices market represented 5% of our sales in the quarter, and we were very pleased that our sales grew by a strong 31% in U.S. dollars and 29% organically. This was really driven by growth in wearables, handsets, laptops and accessories, which more than offset some modest decline in sales related to tablets. Sequentially, our sales grew by 32%, which was much better than our expectations coming into the quarter as we were able to react quickly to support incremental demand from a number of customers.

Looking to the fourth quarter, we now expect our sales to increase by approximately 35% from these third quarter levels. And for the full year 2026, we anticipate robust sales growth of more than 30% compared to prior year.

I'm extremely proud of our team working in the always dynamic mobile devices market as their agility and reactivity has once again enabled us to outperform expectations in the quarter and to capitalize on the opportunity of increased demand from our customers. I'm confident that with our leading array of antennas, interconnect products and advanced mechanisms, including hinges designed in across a broad range of next-generation mobile devices, we're well positioned for the long term.

The IT datacom market represented 48% of our sales in the third quarter. Sales in this important market grew by a very strong 117% in U.S. dollars and 77% organically. This was driven by continued acceleration in demand for our products used in artificial intelligence applications, together with continued strong demand in our base IT datacom business. On a sequential basis, sales increased by 30% from the second quarter, which was substantially better than our expectation for a mid-teens increase.

I would say that the vast majority of our sequential growth was related to AI, which now does represent approximately 3/4 of our IT datacom sales. As we look towards the fourth quarter, we expect sales to increase again in the mid-single digits from these very strong third quarter levels. For the full year 2026, we expect our sales to more than double compared to prior year, driven primarily by strong organic growth as well as the benefit of acquisitions, including CommScope.

We are more encouraged than ever by the company's position in the global IT datacom market. Our team has done an outstanding job of both securing future business on next-generation systems with a broad array of customers, but also on executing on these exciting programs. In addition, I just want to note that the team at CommScope continues to make great progress in further penetrating the IT datacom market with their advanced optical interconnect solutions.

Accordingly, we now expect CommScope sales in the IT datacom market to more than double for the full year 2026, and we expect that those sales should represent roughly half of their sales for the full year, and that compares to around 1/3 of their sales last year.

The revolution in AI has created a unique opportunity for Amphenol, given our leading high-speed fiber optic and power interconnect solutions. All of these high-technology products are critical components in our customers' next-generation systems. This creates a continued long-term growth opportunity for our company.

Turning to our outlook and obviously, assuming the continuation of current market conditions as well as constant exchange rates, for the fourth quarter, we expect sales in the range of $10.3 billion to $10.5 billion and adjusted diluted EPS in the range of $0.81 to $0.83. This would represent a year-over-year sales increase of 60% to 63% and an adjusted diluted EPS increase of 65% to 69% compared to prior year quarter.

I would just note that this guidance does not reflect any acquisitions that have not yet closed and therefore, does not include AdvancedPCB, Dexgreen or Humanetics Sensors. Our fourth quarter guidance represents also an expectation for full year sales of $36.9 billion to $37.1 billion and full year adjusted diluted EPS of $2.82 to $2.84. This outlook represents a full year sales increase of approximately 60% and an adjusted EPS increase of approximately 70%, very strong performance.

I would also note that we have upgraded our outlook for CommScope, which is included in this full year guidance. We now expect CommScope to achieve $5.1 billion in sales and to contribute $0.18 to our 2026 adjusted earnings per share. I just can't express enough how grateful I am to the entire CommScope team for their amazing work as part of the Amphenol family.

There's no doubt that 2026 has been a very special year for Amphenol thus far. I remain confident in the ability of our outstanding management team to adapt to the many opportunities and challenges in the current environment and to thereby continue to grow our market position while driving sustainable and strong profitability through this year and into the long term.

Finally, I'd just like to take this opportunity to express my gratitude and thanks to our entire global team for their truly outstanding efforts here in the third quarter. You should know that they worked unbelievably hard to deliver this level of growth and profitability, and I am grateful to each and every one of them around the world.

With that, operator, we'd be very happy to take any questions that there may be.

Operator

We have a question from Luke Junk with Baird.

Phần hỏi đáp

Luke Junk

I wanted to start with CommScope. Adam, maybe if you could just give us some insight into the guidance raise this quarter. And then bigger picture, I'd be really interested in your thinking on the virtues of their business model and the current tight supply chain environment. And maybe within that, if you could also just comment on the work you're doing to secure fiber supply and your flexibility in that respect.

R. Norwitt

Yes. Thanks very much, Luke. Well, again, I just want to commend the team at CommScope. Obviously, when we announced the deal, we talked about this company at signing as a $3.6 billion company. And here we are now $1.5 billion more than that this year. And I think when we closed, we said we thought it would be $4.1 billion, so $1 billion more than at the beginning of this year. And that is just a direct reflection of the team's ability to execute in the face of the demand opportunity that is there.

And that demand opportunity for sure is very strong in the data center market, AI and related. They also see strength in their industrial market. And even if the communications network, as I mentioned, we've seen a little bit of softness in the demand there. I think the CommScope team is executing extremely, extremely well.

And when I say executing, I really mean not just doing the things in the factory to make it happen, but also facing up to whatever challenges they may see in the marketplace, challenges around getting enough people in the right places, challenges around getting materials of all sorts, including glass and other things. I mean there are lots of constraints that are there in the world.

And I think the team has done a fabulous job to diversify their supply base to secure supply of everything that they need, including glass and to make sure that the company is positioned to support their customers, not just here in the third quarter and the fourth quarter of 2026, but for the long term.

And as part of the Amphenol family, they have the wherewithal to do that because rather than being in a company that was naturally constrained from a capital perspective and a scale, but in particular, given the financial condition of their prior parent, I would tell you that CommScope is taking full advantage of being part of Amphenol, investing in new technology development, developing a multiplicity of options for all the things that they need across the board as a manufacturer. And I think that long-term positions them very, very well for the future.

Operator

Your next question comes from the line of Varun Govindaraj with Bernstein.

Varun Govindaraj

Congratulations on the strong quarter. I had a question related to NVIDIA architectures. So as we shift from Oberon to Kyber theoretically in 2028, we lose the backplane and then move into that PCB midplane structure. How do you think about that from an Amphenol content standpoint? And have you been having any conversations around this? Would love to get any qualitative color if you can share it? I know it's still early.

R. Norwitt

Yes. Well, Varun, first of all, let me welcome you to our call. And second of all, I think you will learn in the years to come that I don't discuss specific customers, and I'm not going to delve into specific customer-specific architectures. But what I will say is this, I mean, I personally meet with customers all the time. I was meeting with a lot of customers even just in the last few days who are involved in lots of future architectures.

And what we hear from all of our customers across the board who are designing these next-generation architectures for AI, for whatever you call it, AI or SI or accelerated computing, you name however you want to call it, they need more interconnect period. And that more interconnect means more copper, high-speed interconnect. It means more optical interconnect. It means more power interconnect.

And it is really our ability to bring to them the breadth of those opportunities, the breadth of those products, the depth and the new developments that we're offering, the capacity, the capability to scale with them, that regardless of what individual one program or another designs or doesn't design, we hear from all of our customers, a continuity of the intensity of the interconnect architecture that we can bring to them.

Operator

Your next question comes from the line of Amit Daryanani with Evercore.

Amit Daryanani

Adam, if I think about the IT datacom segment growing 30% sequentially, I think it's 2x, which you had initially expected. And I think you said most of this came from AI on the prepared comments. I'm just wondering, the upside and strength that you're seeing over here, is that coming from customers essentially increasing their demand to you? Or was it more driven by your ability to fulfill existing demand faster than you had expected?

And maybe you could just connect that upside to the fact that you're guiding December quarter up mid-single digits for IT datacom broadly. Is that, again, the underlying deployment cadence? Is that more a function of what you think you could deliver?

R. Norwitt

Well, thanks so much, Amit. Look, 30% sequential demand on a market of this size is an enormous, enormous achievement for our team. So I want to say that first and foremost. I think also there is traditionally a little bit of seasonality that comes in certain markets. Hard to say what the seasonality of AI will be. We are still guiding to a growth in the fourth quarter from these very high levels. So I think it's very substantial. I don't think that it's gated -- to say that it's gated by demand or our abilities, I mean, we've been executing really, really well for our customers on their demand.

And I think the strength in the third quarter, it wasn't that anything was pulled in. It was just we satisfied our customer demand, and we were able to execute upon it. And right now, what we see in the fourth quarter is this kind of mid-single-digit increase from already very, very high levels. So I don't think there's any sign of anything there, except that the fact that they're still procuring at these high levels and that we're able to meet the moment of the demand from the customers is a really positive thing from my perspective.

Operator

Your next question comes from the line of Mark Delaney with Goldman Sachs.

Mark Delaney

Congratulations on the strong results. I want to talk about EBIT margins, if you could, please. Overall non-GAAP EBIT margins are nearly 30%, and that's actually the incremental conversion margin the company has historically targeted. I'm sure you'd like to drive profitability higher going forward. But maybe talk a little bit about the ability for the company to take up its view around incremental margins north of the historical 30% target, especially in light of some of the input cost dynamics that are at work in the industry.

Craig Lampo

Yes. Thanks for the question, Mark. Yes. No, listen, first off, you commented on the 29.7% operating margins we had in the quarter. And certainly, we're extremely proud of achieving kind of those high levels of operating margins that we certainly think is deserved given the technology and the value we're bringing to our customers, not just in IT datacom, but honestly in all of our markets.

But that's being driven by a few things. Number one is, obviously, we have significant technology, which I just mentioned and the value being added to our customers, I think, is just driving kind of those margins higher. We're able to share some of those margins with our customers. But you can't do that without strong execution, strong cost discipline by our general managers. And they've just done an outstanding job of leveraging kind of the -- obviously, the volumes that they have in these really complex products that are really hard to make, but do it in a way that ultimately is able to drive margin for the business.

We talked about this 30% conversion margin, kind of, we increased this a little over a year ago now. And clearly, we've already started to kind of approach those levels. So I don't think we would really change our per se long-term target yet. I'm not saying that won't happen kind of in the future here. But there's no doubt, I think as we continue to grow certainly organically and certainly, the acquisitions will have some -- you're going to have some compression on margins as we go forward because typically, those are at the levels of profitability that the company is at.

But certainly, our organic growth as we go forward, I would expect to continue to increase our margins to some degree. And I certainly don't think this 29.7% is kind of the bottom in terms of where we are today. I think that ultimately, as we grow, as our revenue continues to grow, we should be able to expand those margins. So -- and we'll talk about longer-term targets in terms of conversion from there. But essentially, we'd certainly expect to continue to be able to expand those margins.

Operator

Your next question comes from the line of Shreyas Patil with Wolfe Research.

Shreyas Patil

Congratulations on the strong quarter. I wanted to maybe hone in on the power portion of the datacom business. You know the broad trends that are driving up rack power needs towards 800-volt architectures with higher bandwidth and lower latency demands. But curious how sizable power is now relative to your overall AI business? And how fast are you seeing that transition to higher voltage designs?

R. Norwitt

Yes. Well, thank you very much, and I'd like to also extend my welcome to you for the first time on our call. Look, we've talked for a long time about this sort of triumvirate of technologies in data center for us, high-speed, optics and power and how those are all very, very important to the data center, to the people who are constructing these data centers, who are architecting them, but also very important to Amphenol. They each represent real pillar technologies inside our company. And we continue to double down on those pillar technologies.

And if you drill down into power, we've been involved in power interconnect for nearly the entire modern history of Amphenol going all the way back to our defense business, high-voltage industrial business. So we've been working with extremely high-power interconnect knowing how you package that interconnect for efficiency and safety, which are really the two greatest considerations that you have in a power connector.

At the end of the day, and I think I've said this before, like these data centers are basically trying to do a simple thing, which is turn electrons into tokens. And if we can help our customers use less of those electrons through the efficiency of the power interconnect while keeping everything safe and secure, which you need to do, especially as you reach to these very high voltage and power levels, that creates an enormous amount of value for our customer.

In terms of the scale of our power business, and we have a very significant offering in power, I would tell you that across our AI business, without giving specific decimal level numbers, I mean, it's a very meaningful portion of the business that we sell, even if I would say high speed and optics is a little bit -- is certainly more in that order. But it's -- we have a very, very strong leadership position in ensuring that our customers get the right power into their data center. We see this as a high-growth opportunity as the chip architectures consume more power and as our customers drive into new power formats like 800 volt and beyond.

Operator

Your next question comes from the line of Will Stein with Truist Securities.

William Stein

Congrats on the great results and outlook. I wonder if you could talk to us a bit about capital intensity. The company's, I think, historical target was 3% to 4%. The last couple of quarters have been a little bit higher. I'm surprised you've been able to keep it this low, frankly, given the growth. I know a lot of the growth comes from M&A, but still I wonder if it's time to rethink how we model CapEx over the next few quarters or a couple of years. Should we expect above that 3% to 4% historical range?

Craig Lampo

Yes. Thanks, Will. Appreciate the question. I think this 3% to 4% historical range, honestly, probably isn't so different as we move forward. I mean, clearly, as we're growing at this level, we'll have certain quarters, where we will exceed kind of that 4% range and maybe even slightly exceed it for the year, certainly with the growth we have seen, which obviously has been extraordinary. But long term, certainly, as we kind of come down to more normal growth levels over the future, I wouldn't expect certainly much more than that 3%, 4% range.

I think -- at the end of the day, I think that we -- the general capital structure in terms of the capital intensity of our business certainly has grown a little bit. Certainly, we have more automation, I would say, that we have. We've talked about the value that automation provides to the company, which has, I guess, increased -- has increased modestly kind of towards the upper 4%. But I would say the overall range of 3% to 4% is still probably what I would think about with maybe slightly higher than 4% and certainly times where we're growing pretty quickly.

Operator

Your next question comes from the line of Andrew Buscaglia with BNP Paribas.

Andrew Buscaglia

Maybe I wanted to switch gears and just talk about industrial for a second, which the growth surprised me how strong it was. And you made the comment it's broad-based, but I'm wondering if you could talk about, are there like 2 or 3 underlying subverticals? I know it's kind of a hodgepodge, but maybe you can talk to specifically what's driving it and why it's starting to pick up just this year and just now.

R. Norwitt

Yes. Well, thanks very much. I mean hodgepodge sounds a little -- that doesn't sound as positive. I think it's a very diverse set of applications across the industrial market. And I would just tell you, I mean, we track a bunch of these segments, I don't know, a dozen and a half of them or more. And the vast majority of those are growing in double digits organically right now. Everything from building automation, where obviously, we have the addition of CommScope, but we have also strong growth before that. Industrial instrumentation, very, very, very strong, things like oil and gas, where we see great strength, alternative energy, where we see great strength, anything related to electrification, factory automation, heavy equipment. I mean, I'm going down my list here, as you can see, Andrew.

So I wouldn't point to one or another of those segments. I mean, is there some piece of industrial growth that is somehow related to the massive boom in construction related to data center. I think there's some piece, but it's certainly not the predominance or it's not dominating the growth. I think we're seeing some benefit from that. But we're seeing also markets that you would have a hard time to say are correlated to things like data centers also having strong growth.

And I think it's just a testament to a couple of things. Number one is we continue to develop new products, enabling technologies at a time when customers across the industrial market are increasing the electronic content in their products. Whether it's an earthmoving machine or next-generation factory automation or something involved in public safety or whatever, I mean, we just see a lot of increase in electronic content.

And the second piece is that we continue and have continued to expand our product offering and our manufacturing support for customers with the acquisition program of the company. And so we just obviously announced these 4 acquisitions here today. And a couple of those will also expand our product offering for the industrial market. We made earlier this year, El.Com, which expanded our offering for the industrial market.

And -- so we've been very thoughtful about continuing to bring in interconnect, value-add interconnect, sensor, antenna technology that enable our customers across the industrial market. So I feel really good about where that market is. It wasn't always easy. As you know, we had a year or 2 with more tough demand. But we continue to now put together organic growth in the industrial market, which is very robust. I think 25% organic growth on a year-over-year basis is probably the strongest quarter we've had in quite some time.

Operator

Our next question comes from the line of Joe Spak with UBS.

Joseph Spak

Maybe a quick housekeeping and then a question. Adam, on orders, the 1.19 book-to-bill on a much larger revenue base. I know in the past, you've sort of talked about that the time line on yours going out a little bit. Are we seeing customers again sort of extend visibility or any changes there? And then just bigger picture, like I'm wondering how you're thinking about this like over time as data center helps scale optical demand and I think eventually maybe you see some price compression. Do you see further optical gains in any of these other end markets?

R. Norwitt

Yes. Well, thanks, Joe. I mean, look, relative to the question on orders, I mean, I think we've talked about the fact that we've seen customers over the course of the last year kind of opening up their order aperture. Part of that is just the overall environment. It's the certainty of their plans. Part of that is, in certain cases, when we make investments, we try to make sure that our customers are sharing the risk with us. And sometimes that risk sharing has to do with giving us orders that have a certain extension. But look, I don't think there's anything in this quarter changing from maybe what we would have said a quarter ago.

Relative to your question on optics, I mean, right now, we see optics really significantly in, let's say, 3 of our end markets. Obviously, IT datacom, of course, communications networks, and then one which may not always be on the top of people's tongue, which is defense. And I would tell you that our defense-related optics business is a very strong business.

And we're -- again, just as we've talked about having active and passive copper and active and passive optics as part of our -- the sort of 4 quadrants of data transmission offering for data centers, we have the same offering into the defense market, albeit with very different products because of the packaging, the environment that those products go into.

The speeds that you talk about in defense are not quite at the level of the speeds that we talk about in a super cluster of accelerated computers. But nonetheless, these are very high-technology products actually. And it's an area that we've been involved in for an extremely long time, and we continue to double down on that area in terms of high-technology optics.

Now we have a new thing. And that new thing is the acquisition of Humanetics Sensors. And while not a huge company, $70 million in sales, and certainly, it's not closed yet. Humanetics, in addition to having a very nice offering of force sensors, has an offering of fiber optic-based sensing. And what that means is using optical technology as a mechanism to measure certain things, pressure, force, disruptions, things like that.

It turns out that using the refraction of light is actually a very interesting modality for sensing that expands for us the breadth of our sensing opportunities and also allows us to have -- to double down on our capability vis-a-vis optical technology. So that's another area maybe, Joe, where we're seeing some expansion opportunities, and that's probably more in the industrial defense kind of sensing applications. And we'll see what else. But we're really excited as one of the world's largest optical interconnect companies to see this breadth of opportunity.

Operator

Your next question comes from the line of Wamsi Mohan with Bank of America.

Wamsi Mohan

First, congrats on the first $10 billion quarter. I remember when you guys hit $1 billion, so it's quite the milestone. So maybe, Adam, just the growth in IT datacom that we're seeing now, we are seeing the backlog extended maybe a little bit more than historical. How concerned should we be on this further dated backlog on the potential that perhaps neocloud build-outs might suffer from funding concerns? And would you say that there was any lumpiness or timing in demand in Q3 at the expense of Q4 given some very material project ramps that are taking place?

R. Norwitt

Thanks very much, Wamsi. Well, thank you, first and foremost, for acknowledging. I mean, the $10 billion quarter, I too remember when we had our first $1 billion quarter. I also remember when we had our first $1 billion year. So that is a long memory. And it wasn't so long ago, let me just say, it was in 2021 that we crossed $10 billion for the year. And as a slight diversion, if you'll indulge me, that was the year -- at the end of that $10 billion is when you'll recall that we created our 3 operating divisions and promoted 3 exceptional individuals to become President of those divisions.

And I've always talked about how in Amphenol, we're so singularly focused on protecting and scaling the culture of Amphenol. And I think it's not a coincidence to me that we crossed $10 billion in quarterly sales just 5 years after we crossed $10 billion in annual sales. And the real inflection of doing that was the creation of those divisions, which allows us to preserve, secure and thrive with the Amphenol culture. Thank you for the diversion and the opportunity, Wamsi.

But relative to your question on the backlog, I mean, look, I think it's normal to have these longer-dated orders. I talked about some of the basis for that earlier, so I won't repeat myself. I wouldn't say that we have -- that there's an enormous exposure to, as you say, neocloud. I mean the vast majority of the demand that I think we're seeing that our customers are seeing are from some of the world's most highly capitalized companies who are doubling down on creating new functionalities, new capabilities and new capacity of compute for their customers.

So I don't know that whether there's one or another neocloud who on a given day, people are a little nervous about. To me, it's more about you have these extraordinary organizations who are making historical investments in a technology that by all means, at least to me, appears to also be historical in nature. And I wouldn't point to any lumpiness last quarter project-based lumpiness. I mean, we're not really seeing project-based lumpiness in our IT datacom business right now.

Operator

Your next question comes from the line of Asiya Merchant with Citigroup.

Asiya Merchant

Great to hear from you guys. And again, my congrats on the quarter as well. Adam, at our conference, you sounded very excited about defense. And clearly, the end market has performed really well. Just if you could think about what are some of the key drivers here, how we should think about long term? At any given point, there's always like political reasons why budgets could be constrained or not in defense. But just how are you thinking about this, not just for the next quarter because you've guided for that, but just longer term or even medium term, how are you thinking about this defense opportunity here?

R. Norwitt

Well, thank you very much, Asiya. And I do recall our conversation, and thanks again for hosting us at that time. Look, we remain very excited about our defense business. In many ways, the defense market is for Amphenol kind of our birthright. Let me say it that way. I mean we've been involved in innovating defense electronics since the early 1940s. And since then, we have been on the vanguard of developing next-generation technologies to meet whatever the moment was at the time.

Today, it's a confluence of moments. You have geopolitics, which are at best to say, dynamic, let me say that. But you also have a technology inflection happening in the defense market, where our customers and the governments who rely upon those customers for their military hardware are accelerating the adoption of next-generation technologies, which have an intensity of electronics and thereby an intensity of the kind of products that we can sell to them.

And then there's a third thing happening, which is not only are we doing that with our traditional customers who we support night and day and adore them, and we'll do everything for them day and night, but we also have an enormous growth and collection of new defense customers who require something even more innovative sometimes, who sometimes require a faster turn, a more creativity in the types of products. And with our breadth and depth of technologies, coupled with our entrepreneurial agility across Amphenol, it puts us in a very, very strong position.

And then the last piece is really geographical. There's no doubt that our country, the U.S. remains the world's largest defense, at least in those countries that we can service as an American company. But we also see a rapid growth of other countries, NATO countries, for example, countries in South Asia, Middle East and otherwise, who are accelerating their investments in their own native military technologies.

And because of our global presence, because we've always had engineers, local support with all of them, we sit in also a uniquely advantageous position vis-a-vis that own dynamic. So you have a lot of stuff going on at once. And I think our company is really purpose-built to take advantage of all of it.

Operator

Your next question comes from the line of Joseph Cardoso with JPMorgan.

Joseph Cardoso

Congrats on the results as well from my end. Maybe for my question, Adam, I just wanted to touch on your comments on CommScope taking advantage of being part of Amphenol, which I think was pretty evident in the results today and kind of disclosures, particularly as we look at the upside for the earnings contribution relative to sales.

So maybe can we just double-click there on the drivers you're seeing across the business, whether that be scale, mix, synergies, et cetera? And as we take a step back, how should we think about the path for CommScope margins to reach the corporate average? What are the main moving pieces now? And how are you thinking about the time line there just given the execution we've seen today?

R. Norwitt

Yes. Well, thanks very much, Joe. Look, again, we are so proud of the team at CommScope. And taking advantage of being part of Amphenol, I kind of like how you say that, because in most companies, when you talk about an acquisition, it's what are we doing to them to make them better. But in this case, the way you phrase it is very much how I would phrase it, which is what are they doing as the "owners" of that business, but in Amphenol, it barely has those quote marks, that concept of ownership.

What are they doing now that they are part of the Amphenol family to take advantage of being part of Amphenol and thereby drive their company to higher levels. We are not creating that success. They are, but they're doing it as part of Amphenol. So what are the things that they are doing? Well, obviously, we have the availability of capital. Craig is here right next to me and has crafted a fortress of a balance sheet where we have the wherewithal to make smart investments in things that have great returns. That's something that they're taking advantage of.

And getting them not to be shy about asking for that is something that we're helping them through a little bit. Helping them globally, how do you expand in places where with the rapid growth that the company has had, I mean, very, very strong growth on a year-over-year basis. How -- what resources do they need to expand in those countries beyond maybe what they would have had before. And we can give them every once in a while a helping hand.

And look, relative to -- you said one word, which I don't use. I won't even repeat it, but it started with an S and ended with an energies. And that's not a word we use in Amphenol. And it's not a word we use because we don't believe we know their business better than they know their business. They know their business best.

They know what to do. It's not, well, how do we take 1 and 1 and make that 1.5 because you have 2 people and they can -- that can be done with the work of one. It's not that whatsoever. It's more that now that you're part of our company, now that we are pushing down through their organization that concept of ownership of entrepreneurship, let's go unleash the power of the people and make it happen.

And that's really what's happened. And that's what's helped their margins because ultimately, margin is just price minus cost. And if you put all the control of those factors under one person, they tend to go higher. And in terms of the long term, I'm sure Craig would agree with me, we think there's great potential for the company in long term to reach the corporate average of Amphenol even if the corporate average has gone up by as much as it has.

Craig Lampo

Yes. I mean I would say actually, right now, they're already kind of in the low 20s on an operating margin basis. So they're already at what the corporate average was as of a couple of years ago or less than a couple of years ago. So I believe that there's certainly tremendous opportunity to ensure to get their profitability up to the company average over time, and they're already doing just a tremendous job this year. And I would say from now versus the beginning of the year, I would say, have more confidence that, that will happen in the long term here.

Operator

Your next question comes from the line of Joe Giordano with TD Cowen.

Joseph Giordano

I know you're all focused as you should be on capitalizing on this enormous opportunity in front of you. But I remember not terribly long ago when a lot of these calls started with you guys talking about the diverse nature of the firm and nothing is really over 20% of sales, and you can weather kind of storms in any one area because of that diversity. This has been all organic. So this change in the percent -- in the split is happening for the best possible reasons. But with IT datacom poised to be like 50% plus of the company going into next year, does it force you to reexamine balance sheet usage? Do you need to scale up in other places to kind of ward off potential as cycles ultimately happen in these businesses?

R. Norwitt

Well, thank you very much, Joe. There's no doubt about it. The diversity of the company is a very important thing to Amphenol. And if we reflect back on why that importance, it's really always been two things. One is insulating us from the risk of exposure to a given market. And the second is ensuring that we have the position and the visibility so that we're present when every one of these electronics revolutions happens.

So there's no doubt about that second piece that, that still continues very strongly. We have a very substantial and broad position across all nooks and crannies of the electronics industry worldwide, no question. Now relative to the fact that this quarter, for example, IT datacom represented 48% of our sales, as you say, it's happened for a good reason.

This has been an area where the world has devoted unprecedented amounts of resources to build upon this exciting new revolutionary technology. That technology, in turn, has required a higher intensity of interconnect products because of the architecture, the nature of the thing, it's a neural network. It needs connections. And we, I think, have done a pretty decent job in Amphenol of capitalizing upon that and taking a bit more than our fair share of that opportunity.

So the stack up of those has resulted in us having tremendous growth in that business, really quadrupling the size of our business over a less than 4-year period, and that then results in the 48%. So then the real question is what are we doing about that? Well, certainly, we will continue to invest heavily in new technologies, making sure that we can meet the moment inside the IT datacom market. It's really a historical opportunity and one that I'm very proud of how our team has reacted to, capitalized upon and has supported customers up and down the stack.

And we will drive that success in the most diverse way possible, across customers, up and down the stack from chip makers all the way up to the web scale hyperscalers who are spending the money and everything in between. And we will drive that across every party, everybody who's working on this. And we'll do that with a multitude of our own technologies on all of those programs. So that diversification within IT datacom is something that we're heavily, heavily focused on, and I'm very proud of what we've achieved there so far.

But at the same time, we will continue to double down on the other markets in Amphenol. Those other markets as evidenced this quarter alone. I mean it's not lost on me that we generated this quarter $1.6 billion in free cash for the company, and we have devoted that $1.6 billion in free cash to 4 acquisitions that roughly cost about $1.6 billion. And if you take out, by the way, AI and the growth in AI, we're driving organic growth in the high teens percentage for the company. So that is a very, very strong performance. And is, again, evidence of the fact that we continue to double down across the electronics industry.

We have another thing in Amphenol as well. And that's this concept of what we say driving with one foot on the gas and one on the brake. Many companies, when you're in such a robust time period, forget about the fact that when you're driving the car, there's 2 pedals. We never forget about that second pedal. And how does that manifest in our company? Well, it means regardless of how good things are, we will continually seek to embed the company with the flexibility, the agility to react in the event that there is a problem in any of our markets.

That means doing smart investments. That means making sure that, that agility of our culture is pushed down throughout the organization at every single lever that our local teams are connected deeply to the market, we have -- a way we say it with our team. If you see something, do something, then say something. Just react immediately to the moment, whether that's a good moment or a bad moment.

And so building in that agility, reinforcing that agility amidst this high growth is another thing that we're making sure and doubling down upon at a time when, yes, we do have a market that's grown organically to a much more significant level than we've had in the past. But if you look at AI as a percent of the world's global spending on electronics, my guess is that is also not an insignificant number.

Operator

Your final question comes from the line of Scott Graham with Seaport Research Partners.

Scott Graham

I wanted to ask the same question or a similar question that was asked earlier about defense. And just hoping that there's any type of unbundling you can do on that would be helpful. Air, land, sea, where are you strongest? Where are you seeing the growth strongest? And importantly, do you think you're getting an additional benefit from the conflicts that are taking place that a year from today, if they're all done with that, that impacts the sales that we saw versus what we saw this year?

R. Norwitt

Yes. Well, thanks very much, Scott. It's never difficult for me to talk about defense. We just have such a fabulous business there, and it's something that we're so focused on and continuing to double down on. Look, I look at a bunch of different segments within the defense market we do. I mean, maybe not quite as many as that diversified industrial, but let's say there's like a dozen different applications that we look at. I mean, last quarter alone, like nearly every one of those grew double digits, nearly every one of them.

So we are seeing in areas like space, in land, unmanned vehicles, communications, avionics, vehicles, munitions related, you name it, naval, strong, strong growth across the board. And I think there's another piece, which is with the various conflicts that are happening, and this is not only specific to the U.S. military, I think we are entering a phase where regardless of the resolution of the conflicts, and I will tell you, I sincerely hope that all these conflicts come quickly to a conclusion.

There is nothing -- I mean, we call it a defense business, not an offense business. I mean, we certainly want these conflicts to come to an end. At the same time, there's no doubt that we are entering into a phase where there will be a significant replenishment requirement, and that is a multiyear, if not multi-decade initiative in multiple countries around the world. And that's happening at the same time as you see militaries around the world doubling down on next-generation technology across all of those segments that we talked about.

So I think -- I don't know if I've done a good job to unbundle it for you. But in terms of like where we are and what the impact is from various spending? Look, obviously, if military spending were to drop precipitously around the world, we would not be immune to that. But there is an offset, which is this replenishment. There is an offset, which is these new technologies. And obviously, we have a company-specific offset, which is our ability to take more than our fair share of that because of the breadth and the depth of our products.

Operator

There are no further questions at this time. So I will hand back to Mr. Norwitt for closing remarks.

R. Norwitt

Well, thank you guys so much. It's really a pleasure. I appreciate you taking time out of your busy day here on such a beautiful fall day. And hard to say it, but we look forward to seeing everybody in the new year. And I wish you -- maybe I'm the first to wish you a happy holidays, and we'll see you in 2027. Thanks so much. Thank you. Bye-bye.

Operator

This concludes today's call. Thank you for joining. You may now disconnect your lines.